Worry-Free Money provides hope for families

The new book by renegade financial advisor Shannon Lee Simmons creates a useful shared vocabulary for talking about money. It shares relatable stories about how families can get on track

Shared vocabulary is a super-important concept in families, and sometthing I think about when I select books. If our family doesn’t have a shared language in which words have a stated and mutually agreed-upon meaning, then meaningful conversation is simply not possible.

For example, take the area of spirituality. Perhaps you use the word Allah in your home to describe a higher power. But at my house, we refer to Mother Nature as the one who gives life to people, pets and plants. That’s our family’s shared vocabulary.

Just as in the area of spirituality, families need a shared vocabulary for talking about money. And I believe it goes much deeper than allowance. I want to include my kid in the bigger conversation. I want him to learn the basic concepts of financial literacy and develop competence on his way to financial independence.

At the same time, I don’t want to invite my kid into the freak-outs I sometimes have about money. I don’t want to scare him or put too much on his shoulders. I know I need to heal my own relationship with money before I can safely bring my kid into the conversation. I believe this book can help my family find a shared vocabulary around money, and that’s my biggest reason for recommending it to all my parent friends.

For example, Simmons introduces the term EROI to describe our emotional responses to the things we buy. By describing a 1-5 scale on which family members can rate the emotional return on investment for each expense, she gives families a new way to discuss their differences. It’s a rational vocabulary that might just replace fighting words and result in solutions.

Sharing a relevant message

Maybe it seems obvious that families need to get real about money.

But for many families, it’s not. According to a recent CBC article, household debt as a proportion of household disposable income is rising at a dangerous rate. As of December 2017, for every dollar of income they have, Canadians have $1.71 of debt. That’s dangerous now because, though interest rates have been low in Canada for at least the past seven years, in June 2017 the Bank of Canada slowly started to ease upwards the lending rate, putting more financial pressure on debt-laden families.

Despite the clouds on the horizon, with Simmons’ help, I’m looking at my 2018 financial situation with a positive outlook.

Her philosophy reminds me that money-wise choices do not have to reduce my enjoyment of life. I can still have and do the things I really care about. Her book challenges families to find ways to get big emotional bang, but without spending big bucks.

Maybe I can’t really afford dinners out with friends, pampering pedicures, or a weekend-long yoga retreat. That’s a bit of a bummer. But it’s not hard to imagine replacing those expensive activities with cheaper but still emotionally rewarding substitutes: rice-bowl potlucks with friends, relaxing essential-oil baths, and discounted yoga classes with newbie teachers. These choices give decent bangs for fewer bucks, but with the added benefit of not causing financial stress.

Telling relatable stories

Simmons’ whole system of organizing money is centred around one important concept.

Instead of budgeting, she suggests dividing money into four umbrella categories. One for long-term savings, one for short-term savings, one for fixed expenses, and one for variable expenses. She argues that divvying up money in this basic way will make it much easier for you to figure out if you can afford the beach vacation, the gym membership, the perfect pea coat, or the organic beef.

She’s right about budgeting. It’s impossible to stick with an itemized budget. Life is just too unpredictable for that, and every time I try, things go off the rails and I think there’s something wrong with me.

But Simmons uses relatable examples to show how budgets are unreasonable for just about everyone who tries to live by one. She tells stories about her clients that make it clear I’m not bad with money just because I can’t stick to a budget.

Life may be unpredictable, but still, says Simmons, it’s possible — and essential— to plan for the expected and unexpected spikes in spending.

The author, who lives in Toronto with a husband and a new baby, lays out reasonable expectations, even if you’re coming down from the high you might have been on 11 years ago, back when you bought into The Secret‘s way of managing money.

She gets practical about it. She explains how the math works. But this is not a sterile lecture. Simmons’ approach is emotionally compelling. She explains how spending is motivated by the desire to feel good, to satisfy emotional needs.

Her point of view makes me ask myself:  What emotional need is behind this spend? Is there a more financially savvy way to meet the underlying emotional need?

Because, she points out, spending is not truly satisfying if you aren’t sure you can afford the spend.

In one story, Simmons describes the stress and hopelessness felt by the adults in a family with three kids in daycare. Instead of making them feel bad for not adding to their savings, she helps them create a plan that simply helps them avoid going more into debt each month. Great. They feel much better.

In another story, one family is struggling with their university-age daughter’s requests for cash top-ups for her 20-something life. They want to help her, but can’t afford to support the lifestyle her peers seem to live. Simmons encourages the adults to create a modest monthly allowance for their daughter. That way the offspring knows exactly how many beers and music festivals she can afford to enjoy. (Because high EROI!) And soon, everybody’s back to getting along.

Simmons also offers stories about young, single professionals, and people who have faced the unexpected financial changes that come with divorce. So I recommend this book to anyone who aims to be financially responsible — no matter age, stage or status.

But the stories about families with children at home particularly resonated for me. She encourages open, honest dialogue that includes children in decision making about spending. This book gives me hope that talking about money can be an open and positive learning experience for my son.


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